Hon Chris Penk

Minister for Building and Construction

The Coalition Government is beginning its fight to lower building costs and reduce red tape by exempting minor building work from paying the building levy, says Building and Construction Minister Chris Penk.

“Currently, any building project worth $20,444 including GST or more is subject to the building levy which is paid at $1.75 per $1,000 of building work value.

“Cabinet has agreed that from 1 July this year, all projects under $65,000 including GST will be exempt from paying the levy delivering a meaningful and welcomed savings for Kiwi families.

“This change will reduce unnecessary red tape and mean Kiwis making small improvements to their homes, such as bathroom or kitchen renovations will save up to $113.

“Building costs are too high and have risen 41.3 per cent since 2019. Analysis shows it is around 50 per cent more expensive to build a standalone house in New Zealand than in Australia – this must change.

“High construction costs have made it harder for families to get into their first home and has exacerbated New Zealand’s housing crisis.

“This week Cabinet has agreed to an ambitious work programme in building and construction to reduce building costs, streamline the building consent system and make it easier to build.

“Today’s change is a small step in the Government’s plan to tackle sky-high construction costs and deliver the affordable homes that Kiwis deserve.

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